# Is there such a thing as resonance in economic underliers?

In physics the occurence of resonance is explained and widely understood in its linear form and subject to research in nonlinear resonance.

Example for instance are resonant frequencies of objects.

Now it is not so much of a stretch of imagination to look for resonance in economic times series.

Correlation is only a linear measure of linking time series and it doesnt explain the mechanism for resonance.

Can we explain selloffs and squeezes by resonant interactions of a complex system and is it possible to detect resonance in stock price time series of multiple stocks?

• It's hard to find something like a "natural frequency" in the time series of a tradable asset. If it existed, it would allow for making big profits by buying bottoms and selling tops, which would lead to nullify such frequency. – Lisa Ann Mar 30 at 14:15
• There doesn’t need to be a single natural frequency to do so. In fact it could be that there are an infinite number of eigenfunctions corresponding to eigenfrequencies. Maybe even the eigenfunctions don’t correspond to a single set of type of function either. I am just wondering how one could approach this. There are equation free models that will give you a spectrum of Eigenvalues real and imaginary and maybe in the Modulation of these eigenvalues it is possible to deduce resonance at times of extreme selloffs for instance? – AndiAna Mar 30 at 18:14

GBM: $$dS=\mu S dt+\sigma S dZ$$
OU: $$dX=\theta(\mu - X)dt+\sigma dW$$